By Kimberley Kao and Fabiana Negrin Ochoa
Stock-market swings set the tone for early trading in Asia as investors weighed local developments against U.S. rate-cut hopes and a positive cue from Wall Street overnight.
Growing hopes for a Federal Reserve rate reduction after soft jobs data are buoying risk sentiment, with many indexes in the green on Tuesday but volatility prevailing.
"Asia markets are taking their cue from the U.S., with hopes for an aggressive Fed easing cycle fueling demand for risk assets," said Frederic Neumann, chief Asia economist at HSBC.
"Even as clouds loom over global trade and U.S. consumer demand, a gradual rotation of global capital out of U.S. markets will likely keep moment going."
Japan's Nikkei Stock Average scaled yet another new peak early in the session, crossing 44000 for the first time, aided in part by some clarity on domestic political headwinds following Prime Minister Shigeru Ishiba's decision to step down after a long period of uncertainty.
Ishiba is known as a fiscal hawk, and the current candidates to succeed him are seen as less committed to fiscal discipline than he is, leading to a positive short-term reaction and a sense of hope in the stock market, said Kohei Onishi, senior investment strategy researcher at Mitsubishi UFJ Morgan Stanley Securities.
Some more certainty on U.S. tariffs helped, too. Japanese carmakers were broadly higher after Japan's top trade negotiator, Ryosei Akazawa, said U.S. auto tariff cuts will likely kick in by Sept. 16.
Akazawa then warned that country-wide duties on Japan's exports will still hurt the economy. The Nikkei erased gains of as much as 1.2% and was recently 0.1% lower.
Politics were also front and center in Indonesia, with the removal of Finance Minister Sri Mulyani Indrawati on Monday rattling investors.
Indonesia's Jakarta Composite Index was recently 1.7% lower, while the rupiah weakened against the dollar to 16,490, reflecting concerns that the exit of Sri Mulyani--widely seen as a fiscal guardian that helped steady the country's finances--will lead to unwelcome policy shifts.
Chinese stocks started the day lower, with the Shanghai Composite Index falling 0.3%. Property shares bucked the trend, sending Hong Kong's benchmark Hang Seng Index up 0.8%. A gauge of Hong Kong-listed tech companies was 1% higher.
Elsewhere, South Korea's Kospi and Taiwan's Taiex added 1.1% each.
Gold rallied to yet another a record high above $3,600 a troy ounce, driven by haven demand and expectations of a Fed easing, which is positive for the noninterest bearing metal.
Now, all eyes will be on the U.S. inflation data due later this week, which will "test the resilience of the current rally" in Asia if there are any upside surprises, said Charu Chanana, chief investment strategist at Saxo Singapore.
--Megumi Fujikawa contributed to this article.
Write to Kimberley Kao at kimberley.kao@wsj.com and Fabiana Negrin Ochoa at fabiana.negrinochoa@wsj.com
(END) Dow Jones Newswires
September 09, 2025 01:30 ET (05:30 GMT)
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